Auto parts retailer Pep Boys - Manny, Moe & Jack (
) late Tuesday said its planned takeover by private equity firm
Gores Group has been canceled, sending its shares plummeting in
In pursuant to the terms of the terminated deal, Pep Boys will
receive $50 million in cancellation fees. The company will also be
reimbursed for additional merger-related expenses.
Pep Boys CEO Mike Odell commented, "Our current intention is to
use our cash on hand and the settlement proceeds to pay down our
term loan this year and then to refinance our senior subordinated
notes in 2013."
The two companies had agreed to the deal back in January, buy
Gores Group got cold feet after PBY's first quarter earnings were
much lower than expected.
Pep Boys shares fell $2.64, or -24%, in premarket trading
The Bottom Line
Shares of Pep Boys (
) have a 1.08% dividend yield, based on last night's closing stock
price of $11.09. The stock has technical support in the $8 price
area. If the shares can firm up, we see overhead resistance around
the $11-$12 price levels.
Pep Boys - Manny, Moe & Jack (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 2.9 out of 5 stars.
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, as well as a detailed explanation of
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